Weekly bul­letin 8 April 2024

Around 14% more tourists travelled through Keflavík International Airport in February of this year than the same month of 2023. The duration of stays is shorter than before, with registered overnight stays declining by 2.7% between years in February.
8 April 2024

The week ahead

  • On Monday, the CBI publishes real exchange rate figures.
  • On Wednesday, the Icelandic Tourist Board releases departure figures for Keflavík Airport International and the Directorate of Labour publishes registered unemployment.
  • Price measurements for the April Consumer Price Index will be carried out this week.

Image of the week

Around 14% more tourists travelled through Keflavík International Airport in February of this year than the same month of 2023. The duration of stays is shorter than before, with registered overnight stays declining by 2.7% between years in February according to recent figures from Statistics Iceland. In the past three months, payment card turnover and overnight stays have declined from the previous year at the same time that traveller numbers are up. Since December 2023, visitors to Iceland have stayed for a shorter period and appear to spend less than before. It is hard to say whether this change is the result of seismic and volcanic activity on the Reykjanes peninsula. Some hospitality and tourist companies have had to curtail their activities because of proximity to the lava field and this may account for the change in part. It has also been pointed out that companies in the travel and hospitality sector have increasingly taken their merchant acquiring business to non-domestic service providers. Such payment card turnover is hard to discern in public statistics and could as a result be underestimated. This would not account for the decrease in registered overnight stays though, which could indicate a change in consumer behaviour.

Highlights of the previous week

  • On Wednesday, the Central Bank of Iceland (CBI) released the minutes of the Monetary Policy Committee’s meeting. All Committee members save one were in agreement on maintaining unchanged interest rates. Demand is still strong as reflected in the housing market. There is tension in the labour market and companies appear ready to enter a hiring cycle again while unemployment remains low. There is also still uncertainty about the financing of public expenditure and the resulting impact on demand. The Committee is waiting for clear indications that inflation is “obviously receding” and considers it important that rate cuts begin at “a credible point in time”. 
  • On Thursday, the CBI published the statement of the MPC on changes to the minimum reserve requirements of credit institutions. The MPC met at an additional meeting on 2 April and decided to raise the fixed minimum reserve requirement of credit institutions from 2% to 3% of the reserve base. 
  • The City of Reykjavík auctioned bonds.

Statistics and market data

Weekly bulletin 8 April 2024 (PDF in Icelandic)

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